The Client and Its Challenge
This large healthcare system, with a self-insured and self-administered workers’ compensation claims unit, faced multi-million dollar increases in claims costs due to escalating medical management and indemnity expenses.

The Risk Consulting Approach
Marsh consultants were initially retained to review the client’s workers’ compensation claims management process. Marsh determined that the client’s claims management services had virtually no medical case management or utilization management services. Critical elements of a managed care program, these services are used to ensure appropriate, timely treatment for injured employees and to facilitate safe, prompt return to work. For many companies, the close coordination of medical and disability management services has contributed to the reduction of workers’ compensation claims costs.

The client asked Marsh to identify the dollar impact of not having a managed care program and build a business case for change. Marsh consultants began the process by completing a Managed Care Impact Assessment. This included a review of claims documents, interviews with key stakeholders, and a managed care audit. The audit included an analysis of all managed care program elements, including medical case management, utilization management, bill review, and preferred provider organizations, and focused on the direction and coordination of the program from the perspectives of the medical case manager, claims administrator, and employer.

Lost-time and restricted duty data were used to calculate the client’s lost opportunities for savings. Audit findings were then extrapolated to the entire claims population to determine how much the client could have saved by using a best practices managed care program. This engagement did not contemplate the role of the employee health service in the workers’ compensation process.

Results
Including both quantitative and qualitative results, the final report detailed the client’s lost-time cost savings opportunities and built a business case for implementing a managed care program.

As a result of the Marsh assessment, the client plans to partner with the organization’s senior leadership to develop a model managed care program. This issue has reached the highest levels of strategic planning and the adoption of a managed care program to control workers’ compensation costs is now considered critical to the organization’s success.